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Can't
Be In Business Without the Internet
By Michael Alan Hamlin
June 21, 1999
“I don’t do business with
companies that don’t have a Web page,” I was told last
week. The speaker wasn’t a multinational client — although
multinational clients have told me the same thing — or someone
living outside the Philippines. She was Marivic Puyat, and we were
talking about the Internet shopping she’s been doing lately.
Ms. Puyat, you may recall, is the
managing director of family-owned Magoo’s Pizza. Under her
stewardship, the company has attained a number of firsts. It was
the first fast food chain to offer home delivery, for instance,
back in 1977 — “the good old days,” she says, when
there was no traffic and gasoline was cheap. Her pizzas are the
only ones in town to this day that come in a box that is thoughtfully
designed to easily separate into cardboard “plates.”
“And if there are leftovers
— which doesn’t happen often with a Magoo’s pizza,”
she smiles — the box collapses into a take-home container that
doesn’t take up lots of space in the refrigerator, and fits
neatly into a standard-sized trash can once its contents is gobbled
up. Oh, and Magoo’s square pizzas also offer four extra corners
the competition “cuts.”
With that kind of creative thinking
about customer service, it’s not surprising that Magoo’s
was the first fast food chain to provide customers the convenience
of ordering over the Internet, which Ms. Puyat says has increased
sales about 10 percent. The chain receives an average of 870 “hits”
— or visits — a day, mostly just before lunch and dinner.
About 15 percent produce orders. Magoo’s even receives orders
from overseas Filipinos, who are ordering for friends or relatives
locally. Pretty interesting, that.
Recently, though, Ms. Puyat has been
doing quite a lot of shopping of her own on the Internet. Aside
from books from Amazon.com, she’s purchased airline tickets,
booked hotels, evaluated cruise ships and resorts, and interviewed
photographers. Products and services she can’t find on the
Internet, well, they’re not even in the running for Ms. Puyat’s
business.
And in a real sense, they’re
not even in business.
According to Ramon G. Duarte, who
heads up Citibank’s new Internet-based e-commerce solution
called CitiCommerce, a recent survey of 600 Asia-Pacific executives
revealed that 68 percent of the respondents are undertaking business-to-business
Internet commerce initiatives to take the lead in their industries.
Another 60 percent believe that Internet commerce makes it easier
to sell their products and services.
A whopping 92 percent believe that
they can attract new customers through the Internet, and 85 percent
want to capitalize on international sales. Seventy-three percent
are supplementing their existing business structures through Internet
initiatives. But perhaps even a better indication of the growing
popularity of Internet commerce in Asia is that “CitiCommerce
is largely being driven by the Asia-Pacific,” according to
Mr. Duarte, not the U.S. And, the Philippines is the second country
in Asia to roll out the new service, which integrates banking into
digital, extended value chains of networks of companies engaged
in business-to-business Internet commerce.
Extended value chains are intra-
and inter-enterprise, integrated supply chains, and an increasingly
common fixture of business in the global marketplace. Internet commerce
globally is expected to jump from U.S.$30 billion this year to US$400
billion in the next three years. Of that total, 75 percent will
be business-to-business transactions. The balance will be business-to-consumer
transactions.
The advantages of business-to-business
Internet commerce — aside from tightly integrating your business
with that of your customers — include greater efficiency and
productivity, reduced costs, improved customer services, secure
transactions, fewer errors, and back office automation. For sellers
specifically, according to Mr. Duarte, benefits include a new distribution
network, efficient order processing, invoicing, and automatic collection.
That’s attractive.
Here in the Philippines 300 retailers,
manufacturers, and distributors are integrating their businesses
in extended supply chains to capitalize on those benefits according
to Joel L. Monasterial, technical director at E-Commerce Philippines,
Inc. Mr. Monasterial has helped companies like the SM Group, Procter
& Gamble, PLDT and others implement business-to-business Internet
commerce initiatives. Beginning in 1998, SM Supermarket has outsourced
management of its Internet commerce infrastructure to Mr. Monasterial’s
company.
One of the most attractive features
of business-to-business Internet commerce is automation of payable/receivable
reconciliation, and automatic payment, according to Mr. Monasterial.
A delighted CFO he’s been working with recently said, “Getting
payment without the usual three-day clearing is enough justification
to participate. Because there is an opportunity to automate reconciliation,
the potential is for us to focus more on strategic financial needs
rather than the reconciliation process.”
That’s good business.
Other firms are also looking at,
or focusing on in many cases, business-to-consumer Internet commerce.
We also recently talked about Ramon Garcia, for instance, the president
of the Philippines first real “.com” company, DFNN.com.
Previously, his brokerage began offering Internet trading, the first
Philippine brokerage to do so. DFNN.com will expand the range of
financial services Mr. Garcia’s companies provide over the
Internet.
ABS-CBN is looking at ways to integrate
its retail initiative — Sky Mall — with the Internet to
automate payment and speed delivery to purchasers. Indeed, with
Internet usage in the Philippines growing 49 percent annually and
the new penchant for overseas Filipinos to buy relatives back home
inexpensive computers to lower communication costs, the Internet
is bound to become a seductively luring shopping destination for
millions of consumers who don’t want to deal with traffic,
have better things to do than search for a product all over town,
or simply want to minimize “have-to” shopping in favor
of “want-to” shopping.
So if you’re not on the Internet,
don’t wait. As Mr. Garcia counsels, “plan for the future,
but implement today.”
Copyright © 1999 The Events
& Awards Managers of Asia and
Hamlin-Iturralde Corporation. All rights reserved.
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